Janet Yellen says cannabis companies doing billions in banking would “naturally” help the IRS

By Maureen Meehan

When Colorado Congressman Ed Perlmutter, of the House of Representatives Financial Services Committee, asked Treasury Secretary Janet Yellen on Wednesday if she agreed that cannabis companies’ access to US banks would make tax collection easier by the IRS, she replied, “Yes, of course it would . “

Nobody doubts that the IRS would also like to pour billions in cannabis industry revenues into their coffers. US banks would probably also be happy to take part in the promotion.

Photo by eldadcarin / Getty Images

But how does it work? Here’s a start, at least from the perspective of banks, some of whom are campaigning lawmakers to endorse the Secure and Fair Enforcement (SAFE) Banking Act, which aims to create safeguards and enable financial institutions that offer banking services to have legitimate cannabis-related businesses .

In a recent move to postpone the envelope, the American Bankers Association, Union National Association, United Food and Commercial Workers Union (UFCW) wrote a letter to the Senate leadership asking them to give legitimate cannabis companies access to banking services to grant. The hope, the group said, is to pass marijuana banking reform as part of this year’s National Defense Authorization Act (NDAA).

RELATED: Marijuana Banking Reform: Millions Seek Banking Services Through Defense Law

While marijuana is legal to sell or use to some extent in 47 states and Washington, DC, it is still illegal at the federal level. In states where cannabis is completely legal, financial institutions that accept weed-made cash can face federal fees forcing cannabis growers, distributors, and retailers to conduct their transactions in cash.

“If you really wanted to build an industry dependent on gangs and cartels, monetize everything. It is almost as if the system that is in place now is geared towards promoting things that we don’t want, ”said Senator John Hickenlooper (D-Colo.), speaking at The Hill’s Regulating Cannabis Event.

How cannabis banking laws evolve in the Senate will determine the future of national marijuana reformPhoto by krisanapong detraphiphat / Getty Images

“If you postpone it, the banks can start banking so it’s not a cash business anymore. There are several negative consequences when it comes to a cash business. One is that companies can’t get loans themselves. ”Hickenlooper told The Hill.

Representative Nancy Mace (RS.C.)who voted for the SAFE Banking Act and is one of the few Republicans in Congress to support the decriminalization of marijuana, passed a federal decriminalization and taxation law in mid-November.

RELATED: The IRS Comes Clean On Marijuana And Cryptocurrency Taxes – Is Legalization Next?

“There’s nothing really controversial about cannabis, except here in Washington, where there are some members who are scared or scared of touching it. It shouldn’t be like that, ”Mace said.

“We fund the cartels by all doing cash deals,” added Mace, repeating the idea expressed by Hickenlooper. “It is dangerous.”

RELATED: Cannabis Companies And Taxes: Advice From The IRS

Meanwhile, the Internal Revenue Service is clearly eating up.

In October, the IRS made some useful suggestions to cannabis companies in the form of a National Association of Tax Professionals seminar for cannabis companies to learn that all income from any source is taxable. The IRS also launched a new website last year to tax government cannabis dispensaries.

This article originally appeared on Benzinga and was republished with permission.

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